U.S. officials are denying Iranian President Masoud Pezeshkian’s claims this week to have reached a “good understanding” with the Qatari government regarding the approximately $6 billion in Iranian funds moved to a Qatari bank as part of a hostage deal struck with the United States last year. The U.S. froze the funds after the Oct. 7 Hamas terror attacks by the Iranian proxy group in Gaza and officials told Jewish Insider the funds remain frozen. 

Amid bipartisan pressure following the Oct. 7 attacks, the Biden administration told lawmakers it would effectively refreeze those funds for the foreseeable future. Under the terms of the hostage deal, the funds would not enter Iran and could be used by the regime only for vetted humanitarian purchases outside Iran.

“The funds remain restricted, and we have strong assurances from our partners that they are not now moving,” a Treasury Department spokesperson told JI. “Along with our partners in Qatar and the interagency, we will continue to monitor these accounts closely.”

The spokesperson added, more explicitly, “There has been no change in our position or our understanding with Qatar: the funds remain immobilized.”

A State Department spokesperson told JI that Iran has not accessed or spent any of the $6 billion.

“The funds are subject to strict oversight by the banks, using rigorous measures set up by the Treasury Department, and we retain the ability to prevent Iran from accessing them at any time,” the spokesperson continued.

Sen. Tim Scott (R-SC), the ranking member of the Senate Banking Committee, told JI that he has “received assurances from the Treasury Department that the funds are frozen” — though he said Pezeshkian’s comments “underscore the importance” of passing legislation he is sponsoring to permanently lock down the funds.

The House passed legislation earlier this year to permanently freeze both the $6 billion and other Iranian funds held abroad with substantial Democratic support, but the Senate has not taken up the bill.

Administration officials have said that the funds cannot be spent on terrorist activities and that the Iranian government would not otherwise be using its own funds for humanitarian expenditures. They also said the funds are better-controlled in the Qatari account than they were before the deal. Critics say the funds would free up more room in Iran’s budget for malign activities.

Democrats who called for the funds to be frozen last year said the freeze must remain in place.

“Alongside its proxies Hamas, Hezbollah, and the Houthis, Iran has been waging a vicious campaign of terror against Israel for the past year,” Sen. Jacky Rosen (D-NV) said. “I pushed the Biden Administration to freeze Iranian funds as a way to diminish the regime’s ability to destabilize the Middle East, harm our allies, and threaten our interests, and I will keep working to block any efforts that would undo this freeze.”

Sen. Bob Casey (D-PA) agreed, saying, “The U.S. government must not allow these funds to be transferred to Iran at a time when the Iranian regime is actively attacking and funding terrorism against our ally Israel.”

A spokesperson for Sen. Sherrod Brown (D-OH), the chair of the Senate Banking Committee, said that the Ohio Democrat “continues to strongly believe that the administration must keep these funds frozen.”

Rep. Kathy Manning (D-NC), who supported the House legislation, told JI she’s not aware of any changes to the administration’s policy.

“The U.S. and Qatar rightly froze these funds following the horrific October 7th attack by Iran’s proxy, Hamas,” Manning said. “We have no indication this has changed and under no circumstances should Iran now be able to access these resources.”

Sen. Tom Cotton (R-AR), an ardent critic of the original hostage deal, said he doesn’t trust the administration to keep the funds frozen.

“This administration has consistently sought to appease the Ayatollahs, providing Iran with hundreds of billions in sanctions relief,” Cotton said in a statement to JI. “I have very little confidence that these funds will remain frozen if Biden-Harris are involved.”

Scott also blasted the administration for agreeing to the hostage deal in the first place.

“The Biden-Harris administration’s original decision to release $6 billion to Iran was a grave mistake that created a market for American hostages, emboldened our adversaries, and put a credit on the balance sheets of one of the biggest backers of terrorism,” Scott said. “And we’ve seen the result – Iran’s terror proxies continue to wage war against our ally Israel.”

Richard Goldberg, a senior adviser at the Foundation for Defense of Democracies, noted that Qatar has previously denied that the funds were frozen. He also highlighted that Iran has access to other tranches of funding abroad, some of which it has utilized since Oct. 7. He said that funding must be scrutinized further and should pass legislation freezing all of those funding sources permanently.

This isn’t the first time the Iranian government has claimed to have access to the hostage deal funds despite assurances to the contrary from U.S. officials.

Iranian leaders claimed last December that Iran “has the freedom to utilize the funds based on its needs” and that the funds were “not frozen at all,” shortly before the acting U.S. Iran envoy testified to Congress that the funds would remain frozen.

Iran’s former president said in September 2023, before the funds were re-frozen, that Iran could spend them “wherever we need it,” contradicting U.S. officials who said the funds were highly regulated under the terms of the hostage deal. U.S. officials testified that the then-Iranian leader was not telling the truth.

Jewish Insider’s senior national correspondent Gabby Deutch contributed reporting.